On 17 July 2007, Ambassador Crawford
Falconer, chairperson of the agriculture negotiations, circulated his
45-page revised draft “modalities” containing formulas for cutting
tariffs and trade-distorting subsidies, and related provisions. The
draft is based on WTO member governments’ latest positions in the
negotiations and is an assessment of what might be agreed. Its release
kicks off another intensive series of meetings for members to try to
reach agreement, and probably to amend the draft. (See explanation
below).

This followed two “challenges” papers circulated in April and May,
containing his ideas on where members’ positions might converge.

(The 17 July release was coordinated with
Ambassador Don Stephenson, chairperson of the non-agricultural market
access negotiations, who also circulated
his revised draft
“modalities” paper).

What is this paper? This is
NOT a “proposal”
from the New Zealand ambassador (or from “the WTO”) in the sense that
we would normally understand the word “proposal”. In other words, it
is NOT his opinion of what would be “good” for world agricultural
trade.

Rather, it is an assessment drawn from WTO
member governments’ positions. It is the negotiations’ chairperson’s
judgement of what they might be able to agree — based on what they
have proposed and debated in over seven years of negotiations and
their responses to his previous papers. He has stressed that this is
not final. It puts the possible areas of agreement on paper so that
members can react and further revise the draft. So this paper kicks
off another intensive series of meetings and comment.

What are “modalities”? “Modalities” are ways
or methods of doing something. Here, the ultimate objective is for
member governments to cut tariffs and subsidies and to make these
binding commitments in the WTO. The “modalities” will tell them how to
do it, but first the “modalities” have to be agreed.

With 150 members and thousands of products,
the simplest way to do this is to agree on formulas for making the
cuts. These formulas are at the heart of the “modalities”. Once they
have been agreed, governments can apply the formulas to their tariffs
and subsidies to set new ceiling commitments.

However in order to agree to the formulas,
members want a number of other concerns to be part of the deal. These
include flexibility to allow some deviation from the formulas, tighter
disciplines to ensure loopholes are plugged and trade-distorting
subsidies are not camouflaged in permitted policies, and different
treatment for developing countries and some other groups of members.

The result is a document that is
considerably more complicated than formulas alone. But the aim is
still to strike a deal that enables governments to open their markets
and reduce trade-distorting subsidies. These new commitments are to be
listed in documents called “schedules” of commitments.